Govt sees cement prices stabilising at Rs 200 a bag

Explaining the industry’s position on Government intervened price reduction he said that there are diverse views among the cement manufacturers on pricing and some sections think that reduction in prices and large-scale imports may lead to decline in domestic production but that will not be the case.

“There would be investments of over $500 billion in various infrastructure projects in India in the next few years which will exponentially increase the demand for cement. Therefore in the medium term there is no justification for apprehending excess cement capacity or losses for cement companies,” he said.

In the long run, the Minister said, prices will come down further as pressure on global cement prices will start easing from October onwards after the Beijing Olympics are over. But domestic demand will go up from around that time only because of the works for 2010 Commonwealth Games in India, he pointed out.

Cement prices were ruling in the range of Rs 210-250 a bag in April following which exports were banned.

Worried over rising inflation the Government had been engaging with the cement manufacturers repeatedly during the past few weeks.

A meeting on cement prices was held by the Prime Minister on Monday following which the Industry Minister, Mr Kamal Nath, met cement manufacturers on Wednesday after which the price reduction was announced.

Taken from Business Line

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